BS: Standard or Poor?

Subject: BS: Standard or Poor?
From: JHW
Date: 15 Jan 12 - 06:25 AM

Why should the financial viability of entire self governing European COUNTRIES be decided by some folks in the US?
And why should we care what the 'markets' think anyway? They're only there to rip us all off!

Subject: RE: BS: Standard or Poor?
From: John MacKenzie
Date: 15 Jan 12 - 06:57 AM

Obviously a post made with full knowledge of the facts!
Nearly every country in the world lives on borrowed money.
When you or I borrow money, our ability to repay the amount borrowed is paramount.
If we do not earn enough to repay the loan, we are either refused, or it is lent at an inflated rate of interest. Even then we need collateral to cover the amount borrowed.
If your capital is made up of an unstable currency, which the Euro is at present, then you are not a good risk.
Remeber that lending money on bundled securities, which weren't worth what they were supposed to be, is what got us into the present financiaol crisis.

Subject: RE: BS: Standard or Poor?
From: Paul Burke
Date: 15 Jan 12 - 07:37 AM

The ratings appear to be self- fulfilling prophecies. If you downgrade a country's rating, that affects its ability to borrow and therefore affects its ability to service current debts. Without transparency from the self- appointed assessors, there has to be the possibility of using a dominant position to manipulate markets. It would appear that this is what is sometimes happening. Remember- the market is not politically neutral, as was shown recently when banks gambled all our money away (i.e. siphoned it to their mates) then twisted states' arms to get us to repay their losses. And then told us we were in debt to them for borrowing all the money we just gave them!

Subject: RE: BS: Standard or Poor?
From: GUEST,Eliza
Date: 15 Jan 12 - 07:41 AM

On a more personal level, who actually decides on one's credit rating? I was pleased to see that mine is 99 per cent, but why not 100 per cent, and who set it at that level? Very strange!

Subject: RE: BS: Standard or Poor?
From: Nigel Parsons
Date: 15 Jan 12 - 02:31 PM

Banks are institutions who lend money to people who can prove they don't need it!

Subject: RE: BS: Standard or Poor?
From: JHW
Date: 15 Jan 12 - 02:44 PM

Guest Eliza that was just my line of thinking. The Raters must have some parameters by which they come up with their figure so why shouldn't Greece or Italy, like you, make their own calculation and challenge them.
My post was made indeed without a full knowledge of the facts and wondering why this agency holds so much sway?

Subject: RE: BS: Standard or Poor?
From: JohnInKansas
Date: 15 Jan 12 - 05:15 PM

A starting point for understanding what's going on might be the actual Full statement from S&P on eurozone downgrades.

Unless you have some familiarity with "finance ratings" in general, the actual "ratings" down at the bottom of the article may look like someone spilled a mess of maggots pasta on the typewriter, but the text of the article may help even the fairly unsophisticated observers to see that there may be some rationale for the most recent changes (or that there actually isn't any).

All S&P does is publish their idea about the level of risk when you "buy into" a particular investment. Nations now are bigger business than big business, so it's appropriate for S&P to treat them like any other borrower or lender.

S&P is just perhaps the best known of many such "ratings agencies" so their opinions are "taken as gospel" by many, while the "intelligent investors" (is that an oxymoron?) take them as just one of many bits of information.

Lots of people do blame S&P for being a major factor in the current international financial disaster, blaming them for "inflating the ratings" for investment vehicles based largely on stupidity but if investments of that kind weren't marketable there'd be a lot fewer investment opportunities. The problem probably lies mostly with the "uncritical believers" who couldn't tell the bad advice from the less bad.

John

Subject: RE: BS: Standard or Poor?
From: Jack the Sailor
Date: 15 Jan 12 - 05:31 PM

It is good to keep in mind that it was the fraud committed by S&P and the other agencies that was the single biggest factor in the housing bubble and credit collapse crisis. They rated a bundle of interest only and fraudulent mortgages AAA causing them to be bought as "safe investments." They down graded the USA to retaliate for being investigated. Who in their right mind gives a flying fork what they say about anyone's bonds?

Subject: RE: BS: Standard or Poor?
From: Uncle_DaveO
Date: 15 Jan 12 - 06:19 PM

Who in their right mind gives a flying fork what they say about anyone's bonds?

People or institutions who need or desire to buy or sell such securities, or those who need or desire to borrow using such securities care deeply.

Dave Oesterreich

Subject: RE: BS: Standard or Poor?
From: Jack the Sailor
Date: 15 Jan 12 - 06:24 PM

The system is forked!

Subject: RE: BS: Standard or Poor?
From: Leadfingers
Date: 15 Jan 12 - 06:36 PM

Sadly , too many people take what they say as carved in Stone

Subject: RE: BS: Standard or Poor?
From: Michael
Date: 16 Jan 12 - 05:04 AM

What I find depressing is their initial pessimism; 'Standard & Poor': No option to be 'Amazing' or even 'Good'.

Mike

Subject: RE: BS: Standard or Poor?
From: pdq
Date: 16 Jan 12 - 10:45 AM

Apparently and attempt at humor, but...

When Standard Statistics Bureau merged with H.V. and H.W. Poor Co., the resulting company was called Standard & Poor's.

Nothing to due with standard (=ordinary) or poor (=broke) although much of Europe is both.

Subject: RE: BS: Standard or Poor?
From: GUEST,JTT
Date: 16 Jan 12 - 01:41 PM

What I can't understand is why countries borrow anyway. Shouldn't they be living on what they make?

Subject: RE: BS: Standard or Poor?
From: gnu
Date: 16 Jan 12 - 03:11 PM

JTT... what? That would preclude the war of the rich on the poor.

The rich work? Insane.

Of course, I am no expert. I am sure someone will educate me.